urn:lsid:ibm.com:blogs:entries-a27fff3d-0d1b-4145-b91e-6726fb6cadf1Insurance - Tags - shopping Incorporate new approaches to address uncertainty and complexity.32013-06-26T15:55:07-04:00IBM Connections - Blogsurn:lsid:ibm.com:blogs:entry-30a46543-c685-47f9-bb1b-4fae9aa4521cExperimenting with the myth of online insuranceChristian Bieckchristian.bieck@de.ibm.com270001WK4FactiveComment Entriesapplication/atom+xml;type=entryLikes2012-06-25T07:54:22-04:002012-06-25T08:02:50-04:00<P align=left>Would you buy insurance online? I would rather not. Not that I don’t buy online, quite the opposite: I regularly buy books, electronics, even clothes and shoes and other stuff. The common factor is that those things have clear specs and that I generally don’t need advice or installation. And when I do, I buy from local providers who deliver high quality 99% of the time (and correct the 1% errors quickly).</P>
<P align=left>Considering that I wouldn’t need either advice or installation for my insurance, why don’t I buy that online? Service! My agent, who I have known for a long time, will do his best to help me when I have a claim – so the extra premium I pay over a pure online offering is ok by me.</P>
<P align=left>Despite conventional wisdom that everything is moving online, a lot of people think like I do. When Pawel Stefanski narrates his insurance odyssey (<A href="https://www-304.ibm.com/connections/blogs/gbs_insurance/entry/how_to_loose_your_customer_in_one_phone_call_or_i_need_a_quote28?lang=en_us" target=_blank>here</A> and <A href="https://www-304.ibm.com/connections/blogs/gbs_insurance/entry/memo_to_insurers_get_smarter_or2?lang=en_us" target=_blank>here</A>), he is more open to buying online than I am, but he will go with whatever best fits his needs. And online is great for shopping (i.e. searching), but when buying other factors than information need and price kick in, not the least that <A href="https://www-304.ibm.com/connections/blogs/gbs_insurance/entry/powerful_interaction_points_ndash_some_thoughts_on_consumer_behavior_and_insurance?lang=en_us" target=_blank>you might want to look somebody in the eye, shake his or her hand and be assured that you are doing the right thing</A>.</P>
<P align=left>It is not only anecdotal evidence - in <A href="http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-gbs-insurance-interaction.html" target=_blank>Powerful interaction points</A>, we found that personal interaction had an almost 80% lock-in overall, whereas online interaction (aggregators and direct websites) had around 40%. But why? What are the factors that influence where we buy? To find out, our friends from the Institute for <A href="http://www.ivw.unisg.ch/" target=_blank>Insurance Economics of the University St. Gallen in Switzerland</A>, led by Tobias Schlager, did a little <A href="http://www.notfunnycartoons.com/comics/full/100720.jpg" target=_blank>experiment</A> for us last year. </P>
<P align=left>We collected a sample of 317 test subjects and split them into 8 groups. We told them to assume they needed insurance, i.e. they were going to look for information and then buy. Half of them were put in front of a computer and asked to browse a (fictitious) insurance website for info, the other half were treated to a call with an agent of the same fictitious brand. We taped the agent beforehand, which meant no questions possible, but everybody got to see the exact same thing.</P>
<P align=left>Well, not quite the exact same thing, because that wouldn’t be very useful. Remember, we had 8 groups, so we prepared four different websites, and four different agent tapes. These were changed along two dimensions</P>
<P align=left><STRONG>quality</STRONG>: How well was the info presented? How relevant? How professional was it? <BR><STRONG>reliability</STRONG>: How consistent and clear is the info? Are there any contradictions? Did we use jargon or obfuscations?</P>
<P align=left>Afterwards, we asked a set of questions, including where they would now buy (source and brand), how well they liked the search interaction etc. A paper is on its way, which will explain the method in more detail. On to results. These were quite surprising, at least if you believe in conventional wisdom… <IMG style="BORDER-BOTTOM-STYLE: none; BORDER-LEFT-STYLE: none; BORDER-TOP-STYLE: none; BORDER-RIGHT-STYLE: none" class="wlEmoticon wlEmoticon-winkingsmile" alt="Zwinkerndes Smiley" src="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/Windows-Live-Writer_9c5cf1f1535b_9430_wlEmoticon-winkingsmile_2.png"></P>
<UL>
<LI>
<DIV align=left>Satisfaction levels were pretty similar overall whether subjects got the online or offline treatment. (Comparing high quality treatments to each other, etc, of course.)</DIV></LI>
<LI>
<DIV align=left>Subjects receiving the high quality/high reliability (HQHR) offline treatment said they were 80% likely to buy offline. HQHR online only led to 29% likelihood of buying online, the rest would still rather buy offline. (Even though they were highly satisfied with the search, and were also quite likely to recommend that way of searching to others.)</DIV></LI>
<LI>
<DIV align=left>Quality and reliability make a huge difference. When one of the two was low for offline, likelihood of purchase dropped to 50%, when both were low it dropped to 20% – a factor of four!</DIV></LI>
<LI>
<DIV align=left>Online, the factor isn’t as large – from 29% to 12.5% – but the end result is just as bad.</DIV></LI></UL>
<P align=left>So far, it fits and is consistent with previous study results. Ultimately, though, what is more interesting for an insurer is whether the search interaction will lead prospects to buy from the brand itself. And this is what we found when we asked our HQHR online subjects where they would buy:</P>
<P align=left><A href="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/Windows-Live-Writer_9c5cf1f1535b_9430_PIPExp_2.jpg"></P>
<DIV><A href="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/BLOGS_UPLOADED_IMAGES/PIPExp.jpg" target=_blank><IMG style="POSITION: relative; MARGIN: 1em 1em 0pt 0pt; WIDTH: 100%; DISPLAY: block; FLOAT: left" alt=Bild src="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/BLOGS_UPLOADED_IMAGES/PIPExp.jpg"></A>&nbsp;&nbsp;</DIV>
<P>So even if as an insurer you have a great website, many people will want to buy from you, but not online. What happens when you can’t steer them to the personal channel they prefer? You might just have generated one of your competitors a lead…</P>Would you buy insurance online? I would rather not. Not that I don’t buy online, quite the opposite: I regularly buy books, electronics, even clothes and shoes and other stuff. The common factor is that those things have clear specs and that I generally don’t...001217urn:lsid:ibm.com:blogs:entries-a27fff3d-0d1b-4145-b91e-6726fb6cadf1Insurance2013-06-26T15:55:07-04:00urn:lsid:ibm.com:blogs:entry-9ab637ce-69ac-4a5c-9ec6-3aa26e79863bThoughts on PIP #1: AustraliaChristian Bieckchristian.bieck@de.ibm.com270001WK4FactiveComment Entriesapplication/atom+xml;type=entryLikes2012-01-23T07:27:12-05:002012-01-23T08:07:21-05:00<p align="left">As announced <a href="https://www-304.ibm.com/connections/blogs/gbs_insurance/entry/powerful_interaction_points_ndash_some_thoughts_on_consumer_behavior_and_insurance?lang=en_us" target="_blank">last week</a>, I will be talking about some data points from the 21,740 consumers we interviewed for the <a href="http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-gbs-insurance-interaction.html" target="_blank">Powerful interaction points</a> study. I will just be going through the alphabet, so first stop is Australia.</p> <p align="left">The Australian market is strongly affected by the country’s geographical location. As a large continent with only slightly more than 22 million inhabitants, it is sparsely populated, and 75 percent of Australians live in one of the five largest cities. This largely urban or metropolitan population leads to typical characteristics: while peer groups are an important source of information, generally online interaction is used more compared to the personal interaction with professionals.</p> <p align="left">Here the top six search and purchase points as a table (a chart is hard to read at 400 px width):</p> <p align="left"> </p><table border="0" cellpadding="2" cellspacing="0" width="400"><tbody> <tr> <td valign="top" width="251">Top six searching interaction points</td> <td valign="top" width="75">Australia</td> <td valign="top" width="72">Mature markets</td> </tr> <tr> <td valign="top" width="246">Website insurer</td> <td valign="top" width="78">56%</td> <td valign="top" width="74">53%</td> </tr> <tr> <td valign="top" width="243">Tied agents</td> <td valign="top" width="80">46%</td> <td valign="top" width="76">43%</td> </tr> <tr> <td valign="top" width="241">Peer groups</td> <td valign="top" width="81">42%</td> <td valign="top" width="77">43%</td> </tr> <tr> <td valign="top" width="239">Aggregators</td> <td valign="top" width="82">40%</td> <td valign="top" width="77">44%</td> </tr> <tr> <td valign="top" width="238">Independent agents</td> <td valign="top" width="83">30%</td> <td valign="top" width="78">38%</td> </tr> <tr> <td valign="top" width="237">Ads (print, TV etc.)</td> <td valign="top" width="83">25%</td> <td valign="top" width="78">13%</td> </tr> <tr> <td valign="top" width="237">&nbsp;</td> <td valign="top" width="83">&nbsp;</td> <td valign="top" width="78">&nbsp;</td> </tr> <tr> <td valign="top" width="237">Top six purchasing interaction points</td> <td valign="top" width="83">&nbsp;</td> <td valign="top" width="78">&nbsp;</td> </tr> <tr> <td valign="top" width="237">Tied agents</td> <td valign="top" width="83">25%</td> <td valign="top" width="78">28%</td> </tr> <tr> <td valign="top" width="237">Website insurer</td> <td valign="top" width="83">25%</td> <td valign="top" width="78">20%</td> </tr> <tr> <td valign="top" width="237">Telephone (with insurer)</td> <td valign="top" width="83">17%</td> <td valign="top" width="78">8%</td> </tr> <tr> <td valign="top" width="237">Independent agents</td> <td valign="top" width="83">15%</td> <td valign="top" width="78">19%</td> </tr> <tr> <td valign="top" width="237">Bank advisors</td> <td valign="top" width="83">5%</td> <td valign="top" width="78">8%</td> </tr> <tr> <td valign="top" width="237">Aggregators</td> <td valign="top" width="84">5%</td> <td valign="top" width="79">11%</td> </tr> </tbody></table> <p> </p><p align="left"> <br>In the Australian market, insurer branch offices are used a lot as a single-insurer personal interaction point – their number is included in the “tied agents” category.</p> <p align="left">As you can see, Australian consumers show relatively strong Internet interaction in searching, mainly on the direct (insurer website) search (56.7 % compared to 49.4% globally and 53% in mature markets). Aggregators are a fairly new phenomenon, which could explain why they are weaker in Australia than overall in the mature markets; purchase via this interaction also drops strongly, especially compared to the direct website. The two most striking data points are the strong use of the telephone for buying insurance – an intermediate form of interaction that has the flexibility of anonymous interaction while retaining a “personal touch” and the ability to ask questions – and the fact that Australian consumers list advertisements as an important source of insurance information. </p> <p align="left">By the way: what “peer countries” would you compare the Australian market to? Mature markets, as I did? English speaking? Asia?</p>
As announced last week , I will be talking about some data points from the 21,740 consumers we interviewed for the Powerful interaction points study. I will just be going through the alphabet, so first stop is Australia. The Australian market is strongly...00873urn:lsid:ibm.com:blogs:entries-a27fff3d-0d1b-4145-b91e-6726fb6cadf1Insurance2013-06-26T15:55:07-04:00urn:lsid:ibm.com:blogs:entry-c18e8889-57c7-4e68-8804-9df527a09c97Powerful interaction points - some thoughts on consumer behavior and insuranceChristian Bieckchristian.bieck@de.ibm.com270001WK4FactiveComment Entriesapplication/atom+xml;type=entryLikes2012-01-16T09:50:32-05:002012-01-16T09:52:37-05:00<p>As you know, I work for the IBM Institute for Business Value, where my job is to create thought leadership through research and analysis, a.k.a. studies. You can find these studies by clicking on the “Capabilities” tab up top and checking under “thought leadership”. Even better, you can download an fresh new app which will allow you to read the most recent studies on your tablet. Here is the <a href="https://market.android.com/details?id=com.woodwing.ibv&amp;feature=search_result#?t=W251bGwsMSwxLDEsImNvbS53b29kd2luZy5pYnYiXQ.." target="_blank">version for Android</a> and here the <a href="http://itunes.apple.com/us/app/ibv/id490117648?mt=8" target="_blank">one for iPad</a>. Or just search for “IBM IBV” in the respective markets. Have fun. (Content will be regularly updated. And sorry, won’t work well on a Smartphone.)</p> <p><a href="https://www-304.ibm.com/connections/blogs/gbs_insurance/entry/where_are_we_on_the_path_to_insurance_2020_part_four_consumers?lang=en_us" target="_blank">A few weeks ago</a>, I wrote about where we are on the path to 2020 with regard to consumers. The four myths I talked about were based on our research over the past few years. On the last myth in particular (“everything will move online”) I promised a bit more detail. Well, actually it will be a lot more detail, but first some background.</p> <p>A little over a year ago, we published a study called <a href="http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-gbs-insurance-interaction.html" target="_blank">“Powerful interaction points – Saying goodbye to the channel”.</a> A large of my job over the past year has been to travel the world and discuss the study with execs. We interviewed consumers in 20 countries. The study was presented in all of these 20 and in at least three more that I know of – that makes a lot of discussions <img alt="Zwinkerndes Smiley" class="wlEmoticon wlEmoticon-winkingsmile" src="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/Windows-Live-Writer_Some-thoughts-on-consumer-behavior-and-i_A4EA_wlEmoticon-winkingsmile_2.png" style="border-bottom-style: none; border-left-style: none; border-top-style: none; border-right-style: none">&nbsp;</p> <p>So for 2012 I plan to do a series, not so mini this time, based on the study data and these discussions. I will start today with some thoughts on the study itself and a little follow-up we did. Then we will take a look at the participating countries, and at similarities and differences across regions. Even across a series, I will only be able to scratch the surface – 21,740 interviews are a lot of data. So let’s get started. A short overview of the study:</p> <p>We surveyed 800 consumer per country (in some twice that number), asking where, channel-wise, they shopped for their last insurance coverage (i.e. where they gathered info, got a quote etc.) and where they than actually bought it. Only new insurance counted, i.e. it had to be sometime in the last five years. The difference in our study to a lot of others is that we are fairly specific about what we mean with the “where”.</p> <p>Take “online”. Did you check with a comparison site, a.k.a. aggregator? Did you gather your information from a customer advocacy website, or insurance discussion forum, or maybe from your friends on Facebook? Or from the insurer website directly or an agent’s website? All of those are online, but they are far from the same thing, and insurers have to treat them differently. Most of them don’t even conform to the classic term “channel”. Which is where the title of the study comes from – from a consumer perspective, it is about interaction, not about being channeled at.</p> <p>Looking at the “where” this way yields something interesting: just as <i>the</i> consumer doesn’t exist, neither does <i>the </i>interaction point that people use. Four out of five consumers use more than one interaction point when searching, and that does not just mean the websites of two different insurers. (That would still be one interaction point.) Almost 20% of consumers use five or more interaction points <i>at the same time</i>! That is why we call the consumer of the future “multi-modal” – you have to talk to them in several and consistent ways.</p> <p>For buying, consumers can’t use more than one, obviously. And the favorite buying avenues were those that involved shaking somebody’s hand or looking into somebody’s eyes: people buy from people. We followed that one up in a further study using an experimental approach, and got the same result. Even better (or worse, depending on your viewpoint): providing a great online experience is important, but giving consumers an outlet to buy other than than website (one with hands and eyes for most people) is even more important.</p> <p>The growing multi-modality of consumers can be seen when we take the data further apart by age groups. If you add up all online interaction (we are talking search now), it is not the young age group that uses “the Internet” most, but rather the middle-aged people, 35 to 45 years old. The most striking age shift comes when we look at dependent vs. independent information. Young people on average prefer agents over brokers/IFAs and the direct insurer website over aggregators, and this behavior is fairly consistent across countries. What does that mean? The younger generation is comfortable doing their own comparisons – they rather collect openly biased information and trust their own judgment than rely on an expert who’s independence they cannot assess. That means having to juggle more information from different avenues, something which many people are becoming more comfortable doing. (I am, of course, talking about the Digital Natives here. Not everything you read about them is an actual fact – e.g. multi-tasking&nbsp; - but that is topic for a completely separate post.)</p> <p>As in all our studies before, we did demographic and cross-country comparisons. Also as always, the country differences were a lot larger than any demographic ones, whether age, education or income brackets. Demographics don’t predict interaction point use well – young people still use aggregators and IFAs, just less than older people do. A much better indicator of interaction point use are psychographics, i.e. segments based on attitudes, values and behaviors. </p> <p>I hope I got those of you who haven’t seen the study yet interested enough to read it. Let me know when you did… <img alt="Zwinkerndes Smiley" class="wlEmoticon wlEmoticon-winkingsmile" src="https://www-304.ibm.com/connections/blogs/gbs_insurance/resource/Windows-Live-Writer_Some-thoughts-on-consumer-behavior-and-i_A4EA_wlEmoticon-winkingsmile_2.png" style="border-bottom-style: none; border-left-style: none; border-top-style: none; border-right-style: none">&nbsp;</p> <p>(tbc)</p>
As you know, I work for the IBM Institute for Business Value, where my job is to create thought leadership through research and analysis, a.k.a. studies. You can find these studies by clicking on the “Capabilities” tab up top and checking under “thought...00975urn:lsid:ibm.com:blogs:entries-a27fff3d-0d1b-4145-b91e-6726fb6cadf1Insurance2013-06-26T15:55:07-04:00